According to corporate affairs ministry documents, Late VG Siddhartha, founder Café Coffee Day, has said to have taken on debt of more than Rs 1,000 crore through entities that housed his personal holdings. Before committing suicide, VG Siddhartha had written to the board and employees of Café Coffee Day, and cited growing pressure from creditors and a private equity partner. He could not take the pressure anymore, hence took the harsh step of leaving the Earth altogether.
According to data, the main debt that Siddhartha had to face was because of two entities, Devadarshini Info Technologies and Gonibedu Coffee and Coffee Day Consolidations.
- In September 2014, Devadarshini verified Rs 471 crore through alternatively convertible debentures from Standard Chartered Private Equity (Mauritius), Credit Opportunities Fund and Asia Credit Opportunities (Mauritius).
- In November 2018, Devadarshini raised Rs 300 crore from SSG Asia and mostly reimbursed these OCDs.
Other obligation offices incorporate a Rs 450 crore introduction in Gonibedu Coffee. It could not be checked whether these obligations have been reimbursed or not.
In a report that was issued on Tuesday says, US private value mammoth KKR has a Rs 255 crore exposure to Siddhartha’s own holding substances. The choice of convertibility could have implied Siddhartha surrendering control of the individual holding elements.
Siddhartha’s real estate firm Tanglin Retail Realty, which claims a data innovation park on Mysore Road in Bengaluru, allocated 30,000 verified, rupee-designated non-convertible debentures (NCDs) — each esteemed at Rs 10 lakh — to Standard Chartered Bank (Singapore) on March 25. As indicated by a source near to Standard Chartered, this Rs 3,000 crore was empowering goals by the Tanglin board and the bank’s presentation did not stretch out to the full amount.
Standard Chartered declined to comment on this report. SSG Capital accomplice Shyam Maheshwari did not react to questions as well. Gonibedu Coffee, Tanglin, Devadarshini Info and Coffee Day Global additionally did not react to inquiries when made.
Recorded Cafe Coffee Day had all out borrowings of Rs 6,547.38 crore as of March 31, 2019, up 30% from the past monetary year. Siddhartha and his firms held a 53.93% stake in the organization, of which 75.70% was promised as of June 30. Siddhartha had acquired from Aditya Birla Finance, Kotak Mahindra Bank, AK Capital, STCI Finance, APAC, RBL Bank and SSG Asia against vowed portions of the recorded firm.
It is true that all these borrowings were made as in the last letter he clearly said,
“I am sorry to let down all the people that put their trust in me. I fought for a long time but today I gave up, as I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other lenders leads to me succumbing to the situation.”